Shares of Microchip Technology Incorporated (MCHP), the worldwide semiconductor manufacturer, are on the verge of a significant breakout. The stuck is stuck in a classic 澳洲幸运5开奖号码历史查询:wedge pattern. In a wedge pattern, there is a declining 澳洲幸运5开奖号码历史查询:resistance level (in red) and rising 澳洲幸运5开奖号码历史查询:support level (in green) that are converging.

Wedge formations are known for being reversal patterns. Since Microchip Techn𓆉ology stock has climbe𒐪d strongly in recent years, as noted by the lower point on the left side of the chart, a reversal would mean a breakout to the downside.

At some point along this convergence, a breakout is guaranteed. It can go all the way to the very end of the 澳洲幸运5开奖号码历史查询:trendlines converging, which would be out in 2020.

However, Microchip Technology is set to release its third quarter 澳洲幸运5开奖号码历史查询:earnings report next Tuesday. Earnin✨gs are a critical time for any stock but more so for stocks ﷺstuck in consolidation patterns like this. It is likely going to tip the scales above or below the key levels on the chart.

In terms of the height of this wedge pattern at more than $40 per share, we probably won't see that large of a jump on earnings. But the breakout will likely signal the start of a nearly 40% move in the stock.

The Bottom Line

Microchip Technology stock is set to climb or drop by 40% in the coming months. A breakout from its current wedge pattern 😼will tell us which directi🍌on this move will take place. Earnings next week should jump start the move.